You are on page 1of 8

IMPACT: International Journal of Research in

Humanities, Arts and Literature (IMPACT: IJRHAL)


ISSN (P): 2347-4564; ISSN (E): 2321-8878
Vol. 6, Issue 6, Jun 2018, 191-198
© Impact Journals

IMPACT OF CULTURE ON ORGANIZATION: AN EMPIRICAL STUDY

Urvashi Sharma1, Rableen Kaur Rao2 & Sohan Lal3


1
Associate Professor, Department of Commerce, Delhi School of Economics, University of Delhi, Delhi, India
2
Research Scholar, Department of Commerce, Delhi School of Economics, University of Delhi, Delhi, India
3
Assistant Professor, Department of English, Satyawati College, University of Delhi, Delhi, India

Received: 29 May 2018 Accepted: 06 Jun 2018 Published: 13 Jun 2018

ABSTRACT

Culture is the acquired knowledge that people use in order to interpret experience and generate social behavior.
Culture help the organization to deal with external adaptation problems and internal integration. Culture forms values
within the organization, creates an attitude and influences the behavior of the individuals. The aim of this paper is to show
through a questionnaire the impact of organizational culture on its employees and overall performance of the
organizations and institutions.

KEYWORDS: Organizational Culture, Culture, Performance, Organizational Performance

OBJECTIVES

• To define what is organizational culture and organizational performance.

• To empirically show the impact of organizational culture on organizational performance...

METHODOLOGY

The primary purpose of the study is to understand about organizational culture, thus primary data has been
obtained using questionnaire-based survey method. Organizational culture and its impact on performance are explained
conceptually and testing empirically with the help of a questionnaire. The questionnaire is divided into three sections.
Demographic information is shown in section one, followed by organizational culture; the third section deals with the
impact on organizational culture on employees.

INTRODUCTION

In today’s highly competitive world of globalization, using traditional ways such as technology, patents,
machinery and economies of scale it is difficult to sustain competitive advantages for the companies. Alternatively, leaders
in the organizations have laid its emphasis on recognizing on its strong culture to have an edge over other in order to
achieve short-term and long-term strategic objectives of the (Fareed et al., 2017). Organizational culture concept lays a
foundation in order to develop organizational behavior. Culture is the defined as ideas, customs, skills, beliefs etc.
of people over a period of time. Leaders have analyzed that every organization have its own unique corporate culture
different from others. It has certain values which help them to find their daily support within organizations (Roth and Lee,
2007). Culture is the sum of the beliefs, the rules, techniques used by organizations institutions which act as artefacts that

Impact Factor(JCC): 3.7985 - This article can be downloaded from www.impactjournals.us


192 Urvashi Sharma, Rableen Kaur Rao & Sohan Lal

are characterized in terms of the collective programming using mind or human populations. Wagner and Bolloju say that
culture is an informal way of sharing different ways of how an individual perceives its life in an organization that makes
employees engage towards that organization which influences them about their own personal life and their work.

REVIEW OF LITERATURE

The review of literature includes the studies and important findings in the past related to organizational culture,
an effect of organizational culture on employees and the overall impact of culture on organizational performance.
The term culture is associated with different peopleswho have different myths, rites, philosophies, languages, and stays at
different places. It is seen that within a society, an organization or institution a member who follow same rituals,
religion usually pass along stories, and jargon as an informal mean to foster or hinder organizational goal (Baker, 1980).
Deshpande and Webster Jr (1989) has defined the culture of organizations as the sum total values, rituals, beliefs that are
shared among individuals to make them understand the functioning of the organization by explaining them the norms and
the behavior to work in the organization. Cameron and Quinn (1999) suggested that within an organizational culture the
assumptions, expectations, memories are the values which are taken for granted in an organization. It talks about the
already underlying ideology which employees perceive and carry in their head to understand the things that happen in and
around organizations.

Organizational culture provides unspoken guidelines which spread a sense of identity which helps everyone to
enhance their social system i.e., the organization. Hofstede et al. (1990) conducted his study over 100,000 employees
working at IBM all over the world to analyze the influence of the national culture that is affecting the behavior of the
organizations. Hofstede et al. divided its study into five dimensions namely “power distance, uncertainty avoidance,
individualism vs. collectivism, masculinity vs femininity and long-term orientation.” Gallagher et al. (2008) The culture of
an organization is one of an important element which influences everything alike organization. Culture act as a
fundamental part of the organization which tells about how the organization operates, what are its mission and vision,
how does it treat its employees within organizations, customers, and stakeholders outside the organization.
Taylor and Wright (2004) suggested that organizational culture is all about they will behave in an organization.
From where it is created and from where they will receive it.

Wilderom and van den Berg (1998)suggested that rather than maintaining a strong culture, the aim should be to
reduce the gap or differences between the organization where employees prefer to work with their cultural practices and
their perception rather than that of organizational practices. Many researchers have a different opinion regarding
performance. Busenitz andBarney (1997) say that performance is one of the combative issues among the organizations.
Izquierdo et al. (2002) says that performance of a certain activity can be defined using 3Es i.e., economy, efficiency, and
effectiveness.

Performance is an ability of an organization to attain its goal using its resources in efficient and effective manner
Daft et al. (2010). The major issue is the different approaches used and its appropriateness in order to utilize and measure
the performance of an organization. Richard and Johnson (2001) defined organizational performance as the ability of the
organization to achieve its goals and objectives. Venkatraman and Prescott (1990) say that it is very difficult to define,
understand its concept and measure it.

NAAS Rating: 3.10- Articles can be sent to editor@impactjournals.us


Impact of Culture on Organization: An Empirical Study 193

ANALYSIS AND FINDINGS

In order to assess the organizational culture various researchers have supported to use organizational practices
(Hofstede et al., 1990);(House et al., 2004);(Pfeffer, 1997)and (Wilderom and van den Berg, 1998)

Demographic Analysis

The survey was circulated among 200 employees who are working in private and government organizations and
institutions in Delhi-NCR. Out of total circulated survey, only 131 employees filled the survey giving a response rate of
65.5 %.

Gender and Sector

The results in Table 1 indicated that out of total 131 responses 52.7%were females and remaining 47.3% were
males. In Table 2 the sector was divided into five categories namely IT, KPO, Pharma, Education and Others The
percentage of the data collected were 22.9%, 19.8%, 3.8%, 21.4% and 32.1% respectively in the above sectors.

Figure 1: Gender and Sector

Age Group, Education, and Work Experience

Table 3 showed that most of the respondents belong to 25-30 years (45%), followed by 18-25 years (31.3%),
30-35 years (13%) and 35 years and above (10.7%). Whereas Table 4 talks about the education qualification where the
majority were postgraduates (61.1%), followed by graduates (29.8%), and few belongs to high school (6%) and others
(3.1%). Lastly, Table 5 talks about the work experience with the present organization or institution. Majority of employees
possess the experience of 0-2 years (52.7%) followed by 2-5 years (25.2%), 5-8 years (9.2%) and 8 years and above (13%).

Figure 2: Age Group Education and Work Experience

Impact Factor(JCC): 3.7985 - This article can be downloaded from www.impactjournals.us


194 Urvashi Sharma, Rableen Kaur Rao & Sohan Lal

Organizational Culture and Its Aspects

In this section we are talking about the organizational culture and its shared sense of the purpose with employees;
Structured Systems within organizations for the processes and functions along with the resources available to achieve the
purpose. Followed by mindfulness of employees and process of learning and continuous improvement within
organizations.

Figure 3: Shared Sense of Purpose

In figure 3 (Table 6) shows that 76% employees feel that the organizational core purpose inspires them to work
with enthusiasm and commitment followed by 19% who feel neutral about it whereas 5% feels the mission and vision of
organization doesn’t lead to commitment. 70% of employees feel that organizations have defined its strategic objective
according to priorities where 23 feels neither they agree nor disagree with objectives followed by 7% who completely
disagrees. Employees in majority find that there is a clear link between organizations objectives and employees priorities.
Also, organizations have clearly defined its core values, principles and ethics which guide the behavior of individuals
within organizations.

The resources which are required within organizations to achieve the objectives are well defined or not is
explained in this paragraph. When talking about roles, authorities, and accountabilities which are related to critical
activities are clearly established and understood by stakeholder or not, 67% of employees said yes they are defined and are
understood by stakeholders whereas 24% feel that they are not sure about it whereas 10% say they are not established
clearly and no information is given to stakeholders. Also, 77% of employees says that their organizations have documented

NAAS Rating: 3.10- Articles can be sent to editor@impactjournals.us


Impact of Culture on Organization: An Empirical Study 195

all the steps, procedures to be followed in order to achieve the objective, assess risk, manage people and its environment
whereas 6% said no such documentation is done in their organization and 18% were having no surety about the same.
Lastly, if any incident happens within the organization then the organization has proper reporting, investigation, causal
analysis and corrective actions for the same. In this 71% of employees agrees that they have trained incident management
people within organization whereas 22% gave a neutral response and 7% disagree that there is no proper incident
management.

Employee Perception: Organizational Culture

This section talks about employees perception regarding its organizational culture, its processes, the mindset of
learning and ways to continuously improve their work. The figure 4 (table 7) talks about organizational culture with respect
to individual employee and its performance. Majority of employee (55%) assess their task in term of risk before starting it
whereas 32% are neutral about risk assessment and 14% does not do risks assessment at all. Organizational culture
important aspect is work stress. 70% of employees say that stress is at tolerable level whereas 10% feels that stress level is
way above tolerance level. A Sense of the responsibility within a organization is important. In order to check the
performance of employee and aspects of future for development. 71% says that they have frequent one to one meeting
discussions with managers to assess performance which helps to align task an boost their career whereas 9% do not
entertain one to one meeting. This one to one meeting helps the supervisors to understand its employee and help him to
achieve full potential at work.Managers are aware of all the happenings in the organizations which gives an edge over
others and help its subordinates according to its potential to improve its performance which overall improves two-way
trust. Majority of employees feel it correct whereas few do not agree with it. Teamwork is an important aspect within
organizational culture and 67% of employees feel that in order to satisfy their internal and external client they prefer team
work over individual efforts. In teamwork every individual feels free to speak their mind in terms of suggesting new ways
to do work, reporting any incident etc. 71% of employees feel that they work according to rules and regulation assigned to
a task. Finally measuring the performance of its employees annually to provide them with compensation and benefits. 79%
of employees say that their organizations benchmark their performance and give reward and recognition accordingly better
than its competitors whereas very few (5%) say they do not evaluate their performance.

Impact Factor(JCC): 3.7985 - This article can be downloaded from www.impactjournals.us


196 Urvashi Sharma, Rableen Kaur Rao & Sohan Lal

CONCLUSIONS

Culture is an important part of an organization to measure its performance. It was seen that culture plays an
important role in explaining mission and vision of the organization, explaining the relationship between superior and
subordinate. Culture tells in and out about the organizations in terms of its work-life balance, stress within the organization,
the relationship among employees, reporting, an incident etc. Majority of employees know about their roles,
responsibilities, risk related to work. Majority of employees finds that the mission vision of the organizations is in line with
the objectives of the individuals. Also, the majority of employees take compensation, its working environment, and work-
life balance as an important measure to explain organization culture.

REFERENCES

1. Baker, E. L. (1980). Managing organizational culture. Management review, 69(7):8–13.


Busenitz, L. W. and Barney, J. B. (1997). Differences between entrepreneurs and managers in large
organizations:

NAAS Rating: 3.10- Articles can be sent to editor@impactjournals.us


Impact of Culture on Organization: An Empirical Study 197

2. Biases and heuristics in strategic decision-making. Journal of business venturing, 12(1):9–30.


Cameron, K. S. and Quinn, R. E. (1999). Diagnosing and changing organisational culture. Reading: Addison-
Wesley.

3. Daft, R. L., Murphy, J., and Willmott, H. (2010). Organization theory and design. Cengage learning EMEA.

4. Deshpande, R. and Webster Jr, F. E. (1989). Organizational culture and marketing: defining the research
agenda. The journal of marketing, pages 3–15.

5. Fareed, M., Isa, M. F. M., Noor, W. S. W. M., et al. (2017). Human resource professionals effectiveness,
organizational culture and high performance work system link: Evidence from Pakistan. International Review of
Management and Marketing, 7(1):85–94.

6. Hosain, M. D. "The Impact of E-HRM on Organizational Performance: Evidence from Selective Service Sectors
of Bangladesh." (2017).

7. Gallagher, S., Brown, C., and Brown, L. (2008). A strong market culture drives organizational performance and
success. Employment Relations Today, 35(1):25–31.

8. Hofstede, G., Neuijen, B., Ohayv, D. D., and Sanders, G. (1990). Measuring organizational cultures: A qualitative
and quantitative study across twenty cases. Administrative science quarterly, pages 286–316.

9. House, R. J., Hanges, P. J., Javidan, M., Dorfman, P. W., and Gupta, V. (2004). Culture, leadership, and
organizations: The GLOBE study of 62 societies. Sage publications.

10. Karbalaei, B., and N. U. K. Shirvani. "Mediating effect of occupational health and employees well being on
organizational performance." Int J Res Bus Manag (IJRBM) 3 (2015): 29-42.

11. Izquierdo,M.,Ibanez,J.,GonzA ́lezbadillo,J.J.,andGorostiaga,E.M.(2002).Effectsofcreatine supplementation on


muscle power, endurance, and sprint performance. Medicine & Science in Sports & Exercise, 34(2):332–343.

12. Pfeffer, J. (1997). New directions for organization theory: Problems and prospects. Oxford University Press on
Demand.

13. Richard, O. C. and Johnson, N. B. (2001). Strategic human resource management effectiveness and firm
performance. International Journal of Human Resource Management, 12(2):299–310.

14. Roth, W.-M. and Lee, Y.-J. (2007). vygotskys neglected legacy: Cultural-historical activity theory. Review of
educational research, 77(2):186–232.

15. Taylor, W. A. and Wright, G. H. (2004). Organizational readiness for successful knowledge sharing: Challenges
for public sector managers. Information resources management journal, 17(2):22.

16. Venkatraman, N. and Prescott, J. E. (1990). Environment-strategy coalignment: an empirical test of its
performance implications. Strategic Management Journal, 11(1):1–23.

17. Wagner, C. and Bolloju, N. (2005). Supporting knowledge management in organizations with conversational
technologies: Discussion forums, weblogs, and wikis. Journal of Database Management, 16(2):I.

Impact Factor(JCC): 3.7985 - This article can be downloaded from www.impactjournals.us


198 Urvashi Sharma, Rableen Kaur Rao & Sohan Lal

18. Wilderom, C. P. and van den Berg, P. T. (1998). A test of the leadership-culture-performance model within a
large dutch financial organization*. In Academy of management proceedings, volume 1998, pages B1–B5.
Academy of Management Briarcliff Manor, NY 10510.

NAAS Rating: 3.10- Articles can be sent to editor@impactjournals.us